29th Sep 2026 06:57
(Alliance News) - Stocks in London are set to open slightly higher on Tuesday, as UK shop price inflation eased and investors digested an expected interest rate hike from the Reserve Bank of Australia.
IG says futures indicate the FTSE 100 to open 6.3 points higher, 0.1%, at 10,691.18 on Tuesday. The index of London large-caps closed down 0.1% at 10,684.88 on Monday.
UK shop price inflation slowed in September as retailers continued to absorb "wave after wave of extra costs", according to the British Retail Consortium and NielsenIQ.
The BRC-NIQ shop price monitor showed annual shop price inflation eased to 1.4% in September from 1.5% in August, although it remained above the three-month average of 1.3%. The survey covered the week from September 1 to September 7.
"Shop price inflation edged down this month, with food inflation falling as competition between retailers continued to deliver value for shoppers," said BRC Chief Executive Helen Dickinson.
"Promotions helped bring down meat and dairy prices, though poor harvests across Europe pushed up fruit prices and high global commodity prices kept chocolate and confectionery prices elevated."
Sterling was quoted at USD1.3233 early Tuesday, lower than USD1.3256 at the London equities close on Monday. Against the euro, sterling fell to EUR1.1651 from EUR1.1658 a day prior.
The euro traded at USD1.1359 early Tuesday, lower than USD1.1370 late Monday. Against the yen, the dollar was quoted at JPY157.34 versus JPY157.44.
Brent oil was trading at USD107.55 a barrel early Tuesday, marginally lower than USD107.60 late Monday.
Elsewhere, UAE President Mohamed bin Zayed Al Nahyan hosted Israeli Prime Minister Benjamin Netanyahu in the Emirates on Sunday, according to official statements from both sides, in a rare public acknowledgement of a meeting between the two leaders.
Netanyahu's office said the visit "focused on strengthening relations between the two countries and on regional challenges" amid US-backed diplomatic efforts over the Iran war.
"The two sides discussed bilateral relations between the UAE and Israel and ways to strengthen and develop them," the Emirati statement said.
In Asia on Tuesday, the Nikkei 225 index in Tokyo was down 1.4%. In China, the Shanghai Composite fell 0.1%, while the Hang Seng index in Hong Kong was down 0.7%.
The S&P/ASX 200 in Sydney was up 0.1% after the Reserve Bank of Australia raised interest rates by 25 basis points, as expected.
The RBA lifted its cash rate target to 4.6% from 4.35%, matching the FXStreet-cited consensus forecast. The decision was unanimous among the nine members of the monetary policy board.
The central bank had held rates in August and June following three consecutive increases.
"Inflation remains elevated and some of the upside risks flagged in August are materialising," the RBA said.
"The conflict in the Middle East has broadened and global energy prices are now much higher than had been assumed in the August forecasts. AI-related demand is driving rapid growth in global prices for technology-related goods. And there remains pressure on domestic capacity."
The RBA said firms were facing increasing cost pressures and were either raising prices for goods and services or considering doing so.
The central bank reiterated its commitment to returning inflation sustainably to its 2% to 3% target range, saying it remained focused on ensuring high inflation did not become embedded.
In the US on Monday, Wall Street ended lower, with the Dow Jones Industrial Average down 0.7%, the S&P 500 down 0.8% and the Nasdaq Composite down 0.9%.
On the corporate front, OpenAI said it would not release its newest artificial intelligence model, Astra 6.1, after internal testing found that it did not meet the company's safety standards.
The announcement came a day before the ChatGPT maker's annual developer conference, OpenAI DevDay, in San Francisco.
Astra 6.1 represented an improvement over previous models in some areas, but "it didn't quite meet the bar in terms of staying within scope and authorisation, and how it communicates back to the user about the type of work it's done," said Saachi Jain, OpenAI's head of safety systems.
Gold was quoted at USD4,133.89 an ounce early Tuesday, higher than USD4,123.33 on Monday.
US President Donald Trump, meanwhile, denied asking Chinese President Xi Jinping whether China wanted to buy US weapons, contradicting comments made by US Ambassador to China David Perdue.
Perdue told Fox News on Sunday that Trump had made the offer during Xi's state visit to the White House last week, amid discussions over Chinese concerns about US arms sales to Taiwan.
"I've never heard of that one, I'm going to have to ask him," Trump told reporters in the Oval Office when asked about Perdue's comments.
"They'd probably like to buy it because we do make better equipment than them, so maybe it's a good idea. But we didn't discuss it."
Perdue had said Trump asked Xi whether he "would like to buy some" US arms and that the two leaders continued to discuss other sales when they met.
A US official separately told AFP that "the US government has no plans to sell weapons to China".
Meanwhile, UK Prime Minister Andy Burnham is expected to use his address at the Labour Party conference to set out a new course for a "Britain where people feel the country has their back again".
Echoing the Liverpool conference's slogan of "Hope again", Burnham will tell party members that "hope comes from honesty and from saying the things politicians usually avoid".
He will also announce a new publicly-owned "Great British Grid" in a bid to bring UK energy costs down in line with European nations within a decade.
In Tuesday's corporate calendar, Close Brothers Group reports full-year results, while Card Factory, AG Barr, Vulcan Two Group and Tortilla Mexican Grill report half-year results.
In the economic calendar on Tuesday, UK mortgage approvals and Irish retail sales are due.
Later, Canada releases gross domestic product figures, while the US reports house price data and Jolts job openings.
By Eva Castanedo, Alliance News senior economics reporter
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